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I’ve got a destroyed credit rating, what can I do?

Having a destroyed credit rating can be an incredibly stressful, upsetting and worrying – poor credit scores can affect everything from getting phone contracts or renting a flat to whether you can borrow money or start a business.

However, destroyed credit ratings aren’t the end of the world. With a bit of work and dedication, there are lots of things you can do to get your credit score back on track.
Here are three simple things you can do that’ll help you turn the tide on your credit score before you know it.

#1: Make sure you know what led to your destroyed credit rating

Before you start trying to fix your credit rating, it’s important to know what went wrong in the first place.

The best place to start is to check your credit scores with each of the three credit agencies. (We’ve written a quick guide on how to do that, too.) Once you’ve done that and have got a rough idea of your credit score, then you can begin to dig a little deeper.

Request copies of your credit report. These only cost £2 and give you a detailed breakdown of your credit history. It contains all public and private information that has been recorded in your name and that is used to determine your credit score. Grab a red pen and go through it carefully, marking anything that is wrong.

If you spot mistakes, make sure you have them fixed. (Here’s a great – and short – article from Experian about disputing mistakes on your credit report.) You can’t do anything about the correct information, but making sure there’s nothing incorrect on your report is a quick way to balance the scales a little.

#2: Address the bigger issues with your credit at hand

If you’ve gone into arrears or are behind on payments, it can be very tempting to pull your head into your shell and hope that it will go away. Sadly, this isn’t going to happen. Not only will this not help, it will also make your credit score worse and undo all your hard work.

Instead, if you think you’re going to struggle with repayments, call the companies and discuss a repayment plan. Often, companies are much more willing to come to an agreement with customers who are proactively working to fix a problem.

This might also be the time to close any lines of credit you don’t use and to cut up any credit cards that burn holes in your pockets.

Put a credit rating repair plan in place

Once you’ve made sure you know where you went wrong, put a plan in place to slowly repair your destroyed credit score. Carefully budget every month to make sure you can make repayments and have enough money to get by. Set yourself clear goals to pay off debts by and stick to them. Systematically use credit cards to buy small, affordable purchases and pay them off the following month. Develop a pattern of spending, borrowing and repaying that benefits you and your credit score, and pretty soon your destroyed credit rating will be well on its way to recovery.

For more information on credit scores – such as how to repair them or how to find the best options for your rating – check out the Credit Score section of our blog. There’s lots of great advice in there – including this article about little things you can do to repair your credit score.